Section 11(a) of the Development Corporation Act of 1979, V.T.C.S. article
5190.6, under which League City established its development corporation, provides that
the members of the board of directors of the industrial development corporation "shall
serve . . . without compensation except that they shall be reimbursed for their actual
expenses incurred in the performance of their duties hereunder." Consistently with article
5190.6, article II, section 9 of the city's industrial development corporation's bylaws
requires the directors of the corporation to "serve without compensation except that they
shall be reimbursed for their actual expenses incurred in the performance of their duties
hereunder."

Pursuant to Attorney General Opinion
JM-195,
Mr. Barringer is not "directly or
indirectly compensated from public funds" for purposes of section 573.041 of the
Government Code. Section 573.041 is, therefore, inapplicable. The City Council of
League City's appointment of Mr. Barringer to the board of the industrial development
corporation did not violate Government Code section 573.041, even though Mr. Parr
participated in the city council's vote (and in fact made a motion to appoint Mr. Barringer
to the industrial development corporation). See City Council of the City of League City
minutes (June 2, 1994).

You next ask whether Mr. Parr may participate in and vote on the removal of
Mr. Barringer from the industrial development corporation. Section 4B(c) of the
Development Corporation Act authorizes the governing body of a city that has established
an industrial development corporation under that act to remove a director of the
corporation "at any time without cause." Likewise, article III, section 1 of League City's
industrial development corporation's bylaws provides that "[a]ll officers [of the industrial
development corporation] shall be subject to removal, with or without cause, at any time
by a vote of a majority of the whole board." See also Articles of Incorporation of City of
League City Section 4B Industrial Development Corporation art. VI.

Nothing in chapter 573 of the Government Code precludes Mr. Parr from voting
on Mr. Barringer's removal. Additionally, we are unaware of any relevant provisions in
chapter 171 of the Local Government Code, regulating conflicts of interest for, among
others, members of the governing body of a municipality. We conclude, therefore, that
Mr. Parr may participate in the discussion of and choose to vote on the issue of removing
Mr. Barringer from the board of the industrial development corporation.

S U M M A R Y

Because a member of the board of directors of an industrial
development corporation, established under the Development
Corporation Act of 1979, V.T.C.S. article 5190.6, receives only
reimbursement for the member's expenses, the member is not
"directly or indirectly compensated from public funds or fees of
office." Thus, section 573.041 of the Government Code, which
generally prohibits nepotistic appointments, is inapplicable.

We find no statute that precludes one member of a city council
from voting on removal of a member of the board of directors of an
industrial development corporation, even where the city council
member and director of the industrial development corporation are
related within the second degree by affinity.

Yours very truly,

Kymberly K. Oltrogge
Assistant Attorney General
Opinion Committee

Footnotes

(1) A letter you attached to your request letter indicates that League City's home-rule charter
"prohibits the appointment of persons related to city council members within the second degree of affinity
to any office, position or service in the City." Letter from Albert Garcia, Attorney, Mayor, Day, Caldwell
& Keeton, L.L.P., to A.T. Frankovich, Mayor, City of League City (Aug. 4, 1995). You do not ask
whether Mr. Barringer's appointment to the board of the industrial development corporation contravenes
the city charter. Indeed, the attorney general does not construe municipal charters. Attorney General
Opinion
JM-846 (1988) at 1.
Consequently, we refrain from considering whether the municipal charter of
League City prohibits the appointment about which you ask.

(2) We express no opinion on whether any provision of the League City municipal charter or any
applicable code of ethics requires Mr. Parr to recuse himself from participation in the city council's
deliberations and vote on whether to remove Mr. Barringer from the board of the industrial development
corporation.